Real Estate Law: Lawful Establishment and Operation of the Management Committee

There are many complex matters and significant reasons that make it difficult for a building manager to make decisions alone. It is advisable for a manager to deliberate together with the unit owners and determine the direction of management affairs, rather than making decisions by themselves.

For this reason, regulations regarding the management committee were newly established through the amendment of the Condominium Act in December 2012.

Under the Condominium Act, a management committee is an optional body that can only be established if its basis is found in the bylaws set forth by the relevant condominium (Article 26-3, Paragraph 1 of the Act). Therefore, if the bylaws do not provide a basis for the establishment of a management committee, it cannot be regarded as a management committee under the Condominium Act and is merely an autonomous body of the relevant condominium.

If the bylaws provide a basis for the management committee, a management committee must be constituted and operated in accordance with the Act on Ownership and Management of Condominium Buildings. Where a management committee has been established, in order to perform management duties pursuant to Article 25, Paragraph 1 of the Act, the manager must obtain a resolution from the management committee regarding the method and content of the execution of such duties (Article 26-3, Paragraph 3 of the Act), and the management committee must supervise whether the manager executes the duties in accordance with the committee's decision (Article 26-3, Paragraph 2 of the Act).

The manager is an organization that represents the management association externally and executes the affairs of the management association internally (Article 24, Paragraph 1 of the Act), and the management committee is an organization that decides on the execution of such affairs by the manager and supervises the execution of affairs by the manager (Article 26-3, Paragraphs 2 and 3 of the Act). Unless otherwise stipulated in the bylaws, a manager cannot be a member of the management committee (Article 26-4, Paragraph 2 of the Act); however, considering the circumstances of the management association (for example, in cases where it is a small-scale collective building and the members are few), the bylaws may stipulate that the manager and the management committee member may hold concurrent positions. 

Even if the bylaws allow the concurrent holding of the positions of manager and management committee member, the provisions of the Condominium Act regarding qualifications must be complied with, so only a person holding the status of a unit owner can become a manager who concurrently holds the position of management committee member.

The Condominium Act limits the qualification of members of the Management Committee to co-owners by stating that they shall be elected “from among the co-owners” (Article 26-4, Paragraph 1 of the Act). Therefore, persons who are not co-owners, such as the spouse or lineal ascendants and descendants of a co-owner, or tenants, do not have the right to be elected as members of the Management Committee. 

Since the Chairperson of the Management Committee is to be elected from among the members, only co-owners can become the Chairperson of the Management Committee, and tenants cannot become the Chairperson. Even if the bylaws stipulate different qualifications, such as expanding the scope of eligibility for election of a member (or chairperson) of the Management Committee, such bylaws are not valid.

In cases where a corporation owns an exclusive portion of a condominium, the corporation acting as the unit owner may become a member of the management committee. However, since the exercise of ownership and other rights regarding the exclusive portion must be carried out by a representative body in the case of a corporation acting as a unit owner, the corporation's representative body may exercise voting rights at the management committee. On the other hand, employees and officers who are not the representative body are, in principle, not permitted to attend the management committee and exercise voting rights.

Attorney Yong-Hwa Lee of Ubiz Law Firm

He possesses extensive experience and deep expertise in the real estate field. His extensive experience has led him to handle a wide range of real estate-related matters, providing clients with reasonable and practical solutions.

UBiz Law Firm, 6th Floor, 418 Nonhyeon-ro, Gangnam-gu, Seoul   02-3452-9290

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